Data-sharing: Tribunal stays CCI ban on WhatsApp, asks Meta to pay half of Rs 213 crore fine

In a respite for Mark Zuckerberg-run Meta, the National Company Law Appellate Tribunal (NCLAT) on Thursday stayed the five-year ban imposed by the Competition Commission of India (CCI) on WhatsApp for its data-sharing practices.

The NCLAT bench, led by Justice Ashok Bhushan, said such a ban could disrupt WhatsApp's business model in the country.

WhatsApp has more than 500 million monthly active users in India.

The appellate tribunal also directed Meta to deposit 50 per cent of the Rs 213 core penalty imposed by the CCI, within two weeks.

The social media giant has already paid 25 per cent of the fine.

Last week, the NCLAT had reserved its order on a plea by Meta and WhatsApp seeking a stay on the CCI order that imposed a penalty of Rs 213 crore for “abuse of dominant position”.

According to the tribunal, the upcoming data protection law in India could address concerns related to data privacy.

WhatsApp's 2021 Privacy Policy allows for user data to be shared with group cos like Meta, and Insta without an “opt out” option.

Earlier this month, social media platform Meta moved the NCLAT against the CCI order. In November last year, the competition watchdog directed WhatsApp to not share user data collected on its platform with other Meta products or companies for advertising purposes for a period of five years, along with imposing a penalty of Rs 213.14 crore on Meta for allegedly abusing its dominant position.

Meta informed the NCLAT that the CCI order has wide ramifications for the industry as a whole and therefore, an urgent hearing in the matter will be required.

Last year, after the CCI directed WhatsApp not to share user data collected on its platform with other Meta products or companies for advertising purposes for a period of five years, the social media platform said it disagreed with the CCI's decision and planned to appeal.

The CCI began a probe in March 2021 into WhatsApp's revised privacy policy, which enabled mandatory data sharing with Facebook (now Meta) and its companies, along with an expanded scope of data collection.